Clearwater PACE, a specialty finance company focused on commercial property assessed clean energy lending, announced Thursday it has closed a credit facility of up to $300 million with alternative asset manager Ares Management Corporation, providing capital that will be immediately deployed to support property owners in more than 40 states seeking financing for energy efficiency upgrades, solar installations, and climate resilience improvements. The financing represents a significant institutional endorsement of C-PACE as an emerging real estate finance product and positions Clearwater to dramatically expand its lending footprint.
Commercial PACE financing — a mechanism that allows commercial property owners to finance energy and resilience improvements through a special tax assessment repaid over 10-30 years with the obligation transferring to the next owner upon sale — has emerged as one of the fastest-growing segments of the green real estate finance market. The C-PACE structure is attractive to property owners because it is a non-recourse assessment rather than a traditional loan, typically senior to existing debt for the assessment amount, and allows financing of 100% of eligible project costs without equity contribution.
C-PACE Market: From Niche to Mainstream
The C-PACE market originated approximately $4.2 billion in new financing in 2025, a 47% increase from the prior year and a tenfold increase from 2019 levels, according to data from PACENation, the industry trade group. The growth has been driven by legislation enabling C-PACE in 37 states and Washington D.C., growing familiarity among commercial real estate owners and lenders, and rising demand for building decarbonization driven by corporate ESG commitments and municipal climate regulations.
Ares Management's decision to back Clearwater reflects the alternative asset manager's broader strategic interest in specialty real estate finance. Ares has been building exposure to non-bank commercial real estate lending across several vehicles, seeing the opportunity created by traditional bank retrenchment from commercial real estate following the 2023 regional banking crisis. C-PACE's senior assessment structure and long duration profile align well with